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ICICI Bank Company Profile

COMPANY PROFILE

ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is


India's largest private sector bank in market capitalization and second largest
overall in terms of assets. ICICI Bank is India's second-largest bank with total assets
of Rs. 3,634.00 billion (US$ 81 billion) at March 31, 2010 and profit after tax Rs.
40.25 billion (US$ 896 million) for the year ended March 31, 2010. The Bank has a
network of 2,016 branches and about 5,219 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services
to corporate and retail customers through a variety of delivery channels and
through its specialised subsidiaries in the areas of investment banking, life and non-
life insurance, venture capital and asset management. The Bank currently has
subsidiaries in the United Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance
Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established
branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE).

History:

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank
was reduced to 46% through a public offering of shares in India in fiscal 1998, an
equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001,
and secondary market sales by ICICI to institutional investors in fiscal 2001 and
fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the
Government of India and representatives of Indian industry. The principal objective
was to create a development financial institution for providing medium-term and
long-term project financing to Indian businesses. In the 1990s, ICICI transformed its
business from a development financial institution offering only project finance to a
diversified financial services group offering a wide variety of products and services,
both directly and through a number of subsidiaries and affiliates like ICICI Bank. In
1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of


the emerging competitive scenario in the Indian banking industry, and the move
towards universal banking, the managements of ICICI and ICICI Bank formed the
view that the merger of ICICI with ICICI Bank would be the optimal strategic
alternative for both entities, and would create the optimal legal structure for the
ICICI group's universal banking strategy. The merger would enhance value for ICICI
shareholders through the merged entity's access to low-cost deposits, greater
opportunities for earning fee-based income and the ability to participate in the
payments system and provide transaction-banking services. The merger would
enhance value for ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI's strong corporate relationships built up over
five decades, entry into new business segments, higher market share in various
business segments, particularly fee-based services, and access to the vast talent
pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI
and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail
finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital
Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI
and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in
March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank
of India in April 2002. Consequent to the merger, the ICICI group's financing and
banking operations, both wholesale and retail, have been integrated in a single
entity.

ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors
and employees.

Board Members:

Mr. K. V. Kamath, Chairman

Ms. Chanda D. Kochhar, Managing Director & CEO

Mr. N. S. Kannan, Executive Director & CFO

Mr. K. Ramkumar, Executive Director

Mr. Rajiv Sabharwal, Executive Director

SHAREHOLDING PATTERN (%)


Awards

ICICI Bank UK, HiSAVE has been awarded 'Best Online Savings Account
Provider 2010 ' by Your Money ,direct consumer awards,UK

ICICI Bank UK, HiSAVE has been commended for 'Best Internet Account
Provider 2010' and 'Best Fixed Rate Account Provider 2010' by Moneyfacts,
an independent consumer finance leading aggregator

Ms.Chanda Kochhar, MD & CEO was awarded the Financial Express Best
Banker Award

For the sixth time in a row, ICICI Bank has received the Most Preferred Auto
Loan Brand in the Financials Services category at the CNBC Consumer
Awards

ICICI Bank has won Gold in the Readers Digest Trusted Brands 2010
Consumer award in the Finance category for a) Best Bank and b) Best
Credit Card Issuing Bank

ICICI Bank won the Best Trade Finance Bank and Best Foreign Exchange
Bank, India at the Finance Asia Country Awards for Achievement, Hong
Kong

ICICI Bank won the Best Local Bank by Trade and Forfaiting Review, UK
ICICI Bank received the Best Trade Finance Bank in India by The Asset Triple
A Award, Hong Kong

ICICI Bank was awarded the Best Trade Finance Bank in South Asia by GTR
(Global Trade Review), UK

ICICI Bank amongst the top 3 to receive the FE- EVI Green Business Leaders
Award, in the banking industry

ICICI Bank wins the Asian Banker Award for Best Banking Security System

ICICI Bank is the first and the only Indian brand to be ranked as the 45th most
valuable global brand by BrandZ Top 100 Global Brands Report.

ICICI Bank has been ranked 1st in the term money category, from a list of 38
leading Banks by the German magazine, Euro. Since commencement of
business two years ago in the German market, this is the 5th
certification/award including 2 certifications from Stiftung warrenttest (for
Savings and Term Deposits) and three "Best Bank" rankings by Euro
magazine.

Forbes' 2000 most powerful listed companies' survey ranked ICICI Bank 4th
among the Indian companies and 282nd globally.

ICICI Bank was awarded The Asian Banker Achievement Award 2009 for Cash
Management in India.

The Economic Times-Corporate Dossier Annual Survey of India Inc's Most


Powerful CEOs featured Ms Chanda Kochhar, MD and CEO, as the most
powerful women CEO in India. She was ranked 13th in the overall power list.

ICICI Group Global Private Clients (GPC) has won the coveted 'Euromoney
Private Banking Award 2010' for Best Bank in the Super-Affluent Category
(USD 500,000 to USD 1 million) - India.

 ICICI Bank wins the Asian Banker Award for Excellence in SME Banking
2009

ICICI Bank won the second prize in the Six Sigma Excellence Awards,
conducted by Indian Statistical institute, Bangalore for "Improving Sales for
TV Banking business"

PERFORMANCE HIGHLIGHTS

 NII has increased 13% to 9264 from 8202 in 2009.

 Net profit has decreased 9.6% to 3758 from 4158 in 2009.


 P/E ratio is 22.5 in 2009 compared to 20.3 in 2008.

 ROE is 7.53% in 2009 as compared to 8.88% in 2008.

 Banks balance sheet contraction continued with advances decline by 3.24%


and deposit by 10.6%.

 Interest spread has increased to 6.29% in 2009 from 6.07% in 2008.

 Net interest margin has been improved to 3.83% in 2009 from 3.24% in 2008.

 The bank is comfortably placed with Capital adequacy at 17.4% and tier I at
13.1%.

 The net NPA increased to 4554 in 2009 from 3490 in 2008 an increase of
30.5%.

CASA RATIO

 In this chart we can see that company’s CASA ratio has been improved to 33%
OUTLOOK AND VALUATION

I have a positive view on ICICI Bank, given its market-leading businesses across the
financial services spectrum. Moreover, I believe that the Bank is decisively
executing a credible strategy of consolidation that should result in an improved
deposit and loan mix and consequently in improved operating metrics over the
medium term.

The strategy involves maintaining strong capital adequacy in the current


environment, while building the necessary base for strong CASA mobilization, going
forward. This is to be achieved through a substantial branch expansion, without
diluting the current focus on stringent cost-control measures. The management has
indicated that cost rationalizations still in process to further bring down the
operating expenses. The Bank’s Capital Adequacy is also amongst the highest at
17.4%, with a substantial 13.1% Tier 1 capital.

I believe that the Bank’s substantial branch expansion and large Capital Adequacy,
especially on Tier 1, are a precursor to market share gains that will contribute to a
substantial Core business growth, though with a lag effect until the macro-
environment starts improving again (hence, potentially in 12-18 months). It is
focusing again on replacing wholesale funds with retail deposits in the international
subsidiaries as well. In the short term, while the Asset-quality deterioration is likely
to start plotting only after a few quarters, the increased focus on Treasury as a
profit-centre, as well as the continued focus on cost controls should provide some
support to the Bank’s P/L account.